January 2018

How Physicians Can Plan and Save For Early Retirement

If you’re a physician and are in the early stages of your career, then it’s unlikely you’ll have started to think about retirement yet.

However, in this post, we’re going to demonstrate how ANY physician can plan ahead and save for early retirement. Do so, and not only will you build your wealth portfolio in a structured and upward way, but you’ll also have more control over your career, allowing you to reap the benefits of hard work both now, and later in life.

It’s worth bearing in mind, that while retirement may seem like a lifetime away, the earlier you plan, the more lucrative, and enjoyable your retirement will be, and if you put the work in now, you’ll find yourself able to live out your golden years in the most comfortable way possible.

Let’s look at some of the ways in which you can plan effectively for your retirement:

Save, Save, Save

It sounds like a given, but you’d be surprised how many physicians don’t have an effective saving plan in place, to aid them in later life. One of the biggest mistakes new physicians make is assuming wealth.

Fresh out of school and university, it’s easy for physicians to be overwhelmed by the amount of money they’re earning, and one of the downsides of this is thinking that there’s no immediate rush to begin saving.

However, the earlier you begin saving, the more sturdy your portfolio will look, and you’ll also find yourself able to GROW your wealth if you decide to make investments, like a lot of the smartest physicians, do.

Plan Financially

You may find the idea of financial planning a distant one – but it’s worth finding a financial advisor early on – and one you get along with, at that.

A good financial advisor will show you a number of smart investments, usually featuring minimal risk, and he or she will be able to look at your finances, and give you solid estimations of when you’ll be able to retire, from looking at your yearly finances.

Plus, if you’re looking to get a mortgage, and buy your first home, a financial advisor can help you with investments that provide both long, and short-term profits.

This can have a huge impact on your ability to live a happy, stress-free life, and will ensure that you don’t end up running out of money early on into your retirement.

Use an Early Retirement Calculator

Retirement calculators are great, not just for planning your actual retirement – but also because they give you a good indication of how much you should be aiming to put away a month in savings.

Some are complex, and some are simple; it’s worth choosing one of the more advanced ones, as they’ll give you a chance to input a ton of your financial data, giving you a far more accurate, and realistic prediction of both when you can look at retiring, along with the amount you should be looking to put away in order to prepare for that. Click here see an awesome Calculator!

If you’re not happy with the numbers, then talk to your financial advisor. For example, if you need to put away $5K/month to retire at 55, consider how much more a month you need to save in order to retire at 50.

While you can’t predict the future and know exactly when you’re going to retire, it’s beneficial to have some rough ideas, so that you can effectively plan ahead.

Diversify Your Wealth

You’ve almost certainly heard of the term diversity when it comes to finances, and there’s no doubt that it’s one of the most effective ways to both grow your portfolio, alongside protecting it from ruin.

As the old saying goes… you should never put all your eggs in one basket…

And while it may seem tempting to simply save cash into various accounts, doing so will put you at greater risk, should there be financial collapses or recessions, and you’ll also sacrifice the ability to profit.

Some ideas for diversifying your wealth include:

Stocks and Bonds

IRA’s

401 (k)s

Profit Sharing Plans

Real Estate

Your financial advisor will give you more details on the specifics of each of the above and will show you which are most suitable for your current situation.

Don’t allow yourself to be pressured into anything, and always take the time to do your research first. (This is why we say find a financial advisor who you can build a relationship with – this will not only ensure you’re getting the best, most transparent advice, but it’ll also make things a lot easier when it comes to actually making investments.)

Don’t Fret About The Future

It can seem daunting thinking about retirement or early retirement- there’s no denying that.

Still, while it’s important to plan ahead and think about what age you want to retire, it’s also important to avoid becoming too caught up in worrying about money.

Life is short, and the most important thing is that you enjoy your good health, and live a life you’re comfortable with.

How ANY Physician Can Invest … Without Financial Experience!

As a physician, you’re blessed with a unique number of advantages that most of the population simply don’t have. Aside from – generally – a very decent income, you’ll also enjoy access to a range of financing options that simply aren’t available to most people…

But in this post, we’re going to take a look at ways you the physician can invest – even if you don’t have any investing experience, or don’t know where to begin!

Now, we’re going to focus on some of the more generic points in this post. If you feel as though you need specific, tailored advice for your situation, then it’s worth getting in touch with an experienced financial advisor, as they’ll be able to give you accurate information relevant to your specific situation.

Still, if you’re new to the world of investment, this article will serve as a great starting point – so, let’s begin!

#1 Build a Portfolio as Soon as Possible

You may think a portfolio is reserved for America’s “elite”… but the truth is, anyone can build their own portfolio… and the quicker you start doing so, the quicker you’ll begin to see a return, growing your wealth, and your income.

There are a number of ways you can start your first portfolio, and it can be as simple as investing in stocks or shares – but of course, this doesn’t come without risk, and you’ll always want to do the appropriate due diligence before risking any of your own money.

That’s somewhat beside the point of this article, however; the main things is that you do so SOON, as, the later you leave it, the less time (and chance) you’re giving yourself of growing a substantial nest egg, that you and your family can enjoy later on in life.

#2 Set Realistic (Yet Ambitious Goals)

One of the major problems faced by many investors is that they don’t have a clear, tangible, and realistic plan in place for their finances.

It’s all well and good investing your money – but if you don’t have any expectations, and aspirations, there’s a good chance you won’t have a clue what you’re actually trying to achieve, and that’s one of the reasons why we recommend you always set yourself goals, whether that be time-frame, or wealth-amount related.

If you opt to use a financial advisor (and you really should once you begin investing more money), they’ll be able to help you put plans in the place for the future.

These plans will typically take the form of 5-year plans but don’t be afraid to ask for goals to be set over shorter, or longer terms.

The more you’re prepared, the better you’ll be able to choose how much – and how often – to invest, and it can make a big difference in your ability to grow a portfolio if you have set achievable goals and targets.

#3 Minimize Taxes

None of us like to pay taxes – but unfortunately, it’s the law, and it’s not likely that’ll ever change!

To ensure that you’re paying as little tax as-is legally required of you, it’s well-worth getting a specialized tax advisor, who’ll be able to look over your investments and advise you on any areas where you’re paying needlessly.

Your financial advisor may also be able to help with this, although they are specialists in investments themselves, so, while they are likely to have good knowledge of the tax system, they too will likely recommend you seek an experienced tax advisor.

Now, you’ll likely to have a pay a fair amount of money if you want a GOOD tax advisor, who’ll save you a substantial amount of money – and while it may be unsettling to see yourself spending so much on things like this, it’s worth noting that in almost all cases, you’ll save more than you spend – so, generally, it’s worth doing.

#4 Stick With Your Investment Plan

Yes, it can be daunting to see your money tied up in investments. It can be scary to leave your funds at risk, during turbulent financial times…

But one of the biggest mistakes that can be made by new investors, is withdrawing their funds too early.

Maybe you see a small profit, and want to ‘run with a profit while you can’… or maybe you see your investments falling in value, and want to ‘save them’…

Whatever your reasons for wanting to withdraw, the majority of the time, it’s in your best interests to see it through and play the long-game.

Of course, your financial advisor will be able to give you tailored guidance on your specific situation – but even then, you always have the final say, and before you even think about entering the investment game, you need to tell yourself that you are in it for the long-run, NOT the short-term.

Try your best to stick with your investment plan – even when you’re tempted to cash-out – and while it’s OK to sell up and run with a profit, if you do want to build substantial wealth for the future, and grow your wealth portfolio, you should always try your best to stick to the plans set in place when you initially invested.

That’s just a few different things to remember before making your first investment. Remember, as a physician, you’re likely to have a fair amount of money free each month to invest – and the more you do so, the more wealth you’ll create later on in your life, so while it can be tempting to spend now, and live a lavish life, just think about the future, and plan ahead.

You’ll be thankful for it later in life, and if you invest smartly – with the help of a trained financial advisor – you could see far more profit, in a lot less time, than you probably think!

Buying your first home is one of the biggest decisions you’ll ever make in your life.

Finding your dream home – and actually purchasing it – is a daunting challenge for many, but it doesn’t have to be.

In this post, we’re going to take a look at three ways you can make your first home-purchase as easy, simple, and hassle-free as possible, and they’re tailored to physicians’ needs.

#1: Remember That Your Real Estate Agent Is NOT Your Friend

That may sound a little strange, but when you think about it, it’ll begin to make more sense.

One of the biggest problems physicians have, when buying their first home, is that they are relatively inexperienced in the home-buying process, and think that a real estate agent is there to be their friend.

At the end of the day, your agent is there to make money – and that’s why you should always maintain a friendly, but professional relationship with them. Doing so will enable you to keep a clear head when making important decisions, and it will also ensure that in the case of things going wrong – or if you simply don’t feel as though they’re doing a good enough job – you can cut ties easily, without it becoming an additional stress in your life.

When looking for a real estate agent, it’s worth reaching out to ones that specialize in helping medical professionals find houses. While the core job of any realtor remains the same, those who specialize in helping physicians are likely to have a better knowledge of how the home-buying process works (in regards to getting mortgages, funding, and so forth) than a non-specialist.

If, after you choose a realtor, things don’t feel right, don’t be afraid to let them know. If you feel as though they’re not pulling their weight – and are hampering your efforts of finding your dream first home – then you’re well within your rights to fire them, and use someone else.

This is YOUR life – and you should never feel bad, or be forced into working with an agent who you don’t think has your best interest at heart.

Here at Physician Banks, we can help you find a real estate agent who does have your best interests at heart – and if you’d like to find out more, click here to get in touch and we’ll show you how we can help!

#2: Know Your Loans

The financial side of buying a home is undoubtedly the most daunting of all, and while you may think you’ve got a good knowledge of the home-buying financial side of things, it’s worth getting things ready well in advance, and things often can – and do – go wrong.

In fact, it’s not uncommon for loans to end up taking a lot longer than you expect – and this is the last thing you want if you’ve found your dream home, but only have limited time to get the funding sorted out.

One of the biggest problems that arise for physicians buying their first home, is the dreaded black mark on your credit file. You may think you have a perfect file… but just one accidental late payment can destroy your chances of getting a mortgage with fair interest rates…

So for the year leading up to your application, you should try to take a somewhat militant approach to paying off any credit cards or bills you have.

The best advice is to simply avoid any form of credit in the year before you want to purchase your home – and this will ensure that you never get yourself into a scenario where you get black marks on your file in the first place.

#3: Don’t Become Emotionally Attached

One of the biggest mistakes you can make is to become emotionally attached to a house, before the agreements, contracts, and financial arrangements have been finalized.

One of the unfortunate facts of life is that things can go wrong – and buying a house is almost never as straightforward as it sounds. You may find an offer you put in didn’t pass inspection, due to insecurities with the house itself – and this is just one example of where the deal can fall through.

Always try to keep an open mind, and keep an eye out for other properties. Until everything is finalized, and set in stone, assume that you may not get the property you want – and while that won’t be the case a lot of the time, it helps to enter with this mindset, as it will ensure you avoid any unexpected, devastating changes in circumstance later down the line.

That’s just a few of the things to be aware of when buying your first home. Above all else, it’s important to be prepared. Make sure you know exactly what you’re getting yourself into – and if you’re ever in doubt about something, don’t be afraid to ask questions, or seek advice.

The most important thing is that you’re happy in your new home – and it’s worth spending the extra time now to ensure that everything goes as smoothly as possible, to avoid problems later down the line.

Get out of debt…One of the biggest factors that prevent us from succeeding in life, and living up to our full potential, is fear. Fear of the unknown. Fear of the present. And fear of the future.

Fear itself is nothing more than an emotion – but often times, there are physical reasons behind us experiencing fear – and one of the biggest underlying factors is debt.

Most of us will have been in or experienced debt at one point in our lives, and it’s not nice. However, the way the world works means it’s commonplace for many people – and if you’re a physician in debt… and if you want to free yourself from the confides it entraps you within…

Then make sure you read this post in full, as we’re going to share a few ways you can get out of debt, easily, and quickly.

#1 Change Your Mindset

One of the most common reasons for continual debt is a lack of positive thinking. It may sound cliche – and almost unrealistic – but you’d be surprised just how many people confine themselves to a life ridden with debt, simply because they can’t shift the feeling of being in debt.

The way you approach the situation will play a huge part on how it unfolds in the future – and if you’re wanting to change your circumstances, and become debt-free, it’s vitally important to take a positive, proactive approach, rather than one where you feel sorry for yourself.

Just by reading posts like this, you’re showing that you DO want to change things – and that’s one of the most important steps. Take some time to yourself every day to appreciate what you do have – and focus on solving your problems, rather than allowing them to take over your life, and engulfing your chances of succeeding.

#2 Public Service Loan Forgiveness

This option is ideal for those who want to pay for their study, but who don’t want to pay the loans back themselves. The best-case scenario is that you realize this before you go to med school – and one of the best methods in this situation, is to take advantage of the military HPSP scholarship. Of course, that requires you to serve in the armed forces – but it can be a great way to study, without racking up large debts.

Of course, if you’re already in debt that’s not really going to help – and public service loan forgiveness can help you if you’re already in debt. In order to qualify for PSLF, you simply need to stick around as faculty in your program for a while. Head to your VA to work (you’ll be able to get a job there a LOT easier than you think), or even find a non-profit, non-academic employer in somewhere like California.

It won’t be for everyone, but for those who it is suitable for, it can be a great option.

#3 Grow Your Income

Just because you’re in debt, doesn’t mean you have to settle for one wage.

If you can realistically manage too, it can be worth picking up a second, part-time job alongside your work as a physician, just to get some extra income coming in each month.

Sure, it’s not the most glamorous lifestyle – but the harder you work now, the more you’ll reap the rewards later on in life – and whether it’s picking up a few extra shifts, or simply doing some weekend work, increasing your income – even just by a small amount – can allow you a LOT of extra room each month to pay pills and clear your debt.

#4 Live To Your Means

We all like the idea of living a lavish, comfortable life – and while, as a physician, you’re very likely to enjoy a high-quality of life a few years down the line, if you’re in debt TODAY, then it’s crucial you live in a way that’s suitable for your budget.

If you find yourself in uncontrollable amounts of debt, then cut back on your purchasing for a few months. Eat out less, and spend more time making your own food. (You’d be surprised how much most people spend on takeout and dinners every month.)

Consider delaying expensive purchases – and tell yourself that once you’ve cleared a significant chunk of your debt, you will be able to buy these things – but it’s much better to clear the debt first so that you can actually enjoy them.

If you opt to go down this route, then it’s worth pointing out that you don’t have to live frugally; just be careful, and make sure to budget each month, so you know exactly what you can, and can’t afford.

#5 Work Hard!

Whatever your current situation is, it’s worth remembering that there is ALWAYS a brighter future ahead – and the way in which you can work toward that future is by working hard.

Don’t think that just because you’re in debt you’re going to be confined to it for years to come. The harder you work now, the quicker you’ll alleviate your debt problems, and the sooner you’ll be able to become financially secure once more.

Like we’ve seen in this post… if you need to get a second job or take on extra hours to boost your income… there’s no harm in doing so.

If you want to look into ways of clearing your debts, then do so.

The most important thing to remember – this is YOUR life – and the quicker you begin making proactive changes to better your situation, the sooner you’ll find yourself on the up, and able to get out of debt, and into a lifestyle where you’re happy, comfortable, and money-worry free.

It can also be worth seeing a specialist debt advisor if you feel as though things are becoming a little too much of a burden – and they’ll be able to work with you on action plans to rid all of your debts.

Don’t be embarrassed by debt – and don’t let it affect your chances of living a wealthy, prosperous life. Take action NOW, and you’ll find things improving a lot quicker than you probably envisage.

There’s also the option of refinancing – and while not suitable for everyone, if it’s something you’ve looked into, and would like to learn more about, then you can get in touch with us using this link, and we’ll show you if we’re able to help!